- SAF production will triple by 2024 but only meet 0.53% of aviation’s fuel needs, highlighting the need for further scaling.
- Incentives like tax credits from the Inflation Reduction Act and state programs drive SAF investments and adoption.
- Cost, energy density, and scalability remain challenges, requiring innovation, more robust policies, and public-private partnerships for broader SAF adoption.
Sustainable aviation fuels (SAF) offer a clear path to reducing aviation’s carbon emissions. The sector contributes 11% of global transportation greenhouse gas (GHG) emissions, making it the third-largest emitter. Transitioning to SAF presents a crucial opportunity, though obstacles remain.
SAF production will triple by 2024, reaching 1.875 billion litres. However, this expansion covers only 0.53% of the industry’s fuel needs. Federal and state tax incentives continue to drive investments, but SAF struggles with cost, scalability, and energy density compared to traditional jet fuel.
The Inflation Reduction Act grants $1.25 per gallon in tax credits for SAF, which cuts GHG emissions by 50%. Additional credits, up to $0.50 per gallon, reward higher reductions. States like Minnesota offer $1.50 per gallon for locally produced SAF, further incentivising growth.
California’s Low Carbon Fuel Standard (LCFS) allows SAF to generate credits, promoting low-carbon fuel production. Proposed 2028 changes aim to penalise traditional jet fuel used in intrastate flights, increasing pressure to adopt SAF.
The International Air Transport Association (IATA) targets net-zero carbon emissions by 2050. CORSIA, the Carbon Offsetting and Reduction Scheme for International Aviation, incentivises SAF by letting operators offset emissions with approved fuels. In the US, the Biden administration’s net-zero goal by 2050 accelerates SAF growth. The SAF Grand Challenge seeks to produce 3 billion gallons annually by 2030.
Despite rising production, SAF remains expensive and challenging to scale. SAF offers less energy density than conventional jet fuel, and limited production capacity leads to higher costs. Industry leaders must foster innovation, create stable regulations, and form strong partnerships to scale SAF.
Demand for SAF continues to exceed supply, driven by emissions reduction goals and financial incentives. Companies must invest in production facilities, expand infrastructure, and ramp up research to close the supply gap.
SAF comes from renewable sources such as used cooking oil, algae, and agricultural waste. As a “drop-in” fuel, it blends easily with traditional jet fuel. However, production falls far short of meeting rising demand.
The industry must push for consistent policies to ensure long-term regulatory certainty, driving investment. Public-private partnerships will be crucial in scaling production and improving supply chains. Stakeholders need to collaborate to address financial risks and infrastructure challenges.
SAF is critical to decarbonising aviation, but the road ahead remains arduous. With SAF demand outpacing supply, the industry must boost production, innovate, and collaborate. Regulatory frameworks and market incentives provide crucial support, but achieving sustainability will require collective action.
Companies in the SAF space must keep up with evolving regulations and actively seize opportunities to reduce aviation’s carbon footprint. By working together, the sector can accelerate toward a low-carbon future.